Last week was noteworthy in our ongoing fight to teach government and industry how to really save money on prescription drug prices without skinning independent community pharmacy.

I was part of a panel testifying during the U.S. House Subcommittee examining federal employee health benefits. Specifically, I spoke in favor of HR 4489, the Federal Employees Health Benefits Program (FEHBP) Prescription Drug Integrity, Transparency, and Cost Savings Act by U.S. Rep. Stephen Lynch (D-Mass).

The bill is intended to lower costs of prescription drugs in the FEHBP and provide the Office of Personnel Management (OPM) with more oversight authority over the prescription drug benefit. Specifically, the act would:

• prohibit certain ownership relationships (such as CVS/Caremark; 
• require Pharmacy Benefit Mangers (PBMs) to return 99 percent of all monies received from manufacturers for FEHBP business;
• require total transparency and disclosure of all contract terms and related information to OPM.

In my testimony, I shared with the committee how transparency in state PBM contracts is projected by the Texas Employees Retirement System to save $260 million during the next four years. This is the result of requiring 100 percent pass through of savings from pharmaceutical manufacturers to the insurer, and hence to the approximately 500,000 current and retired state employees and their families. Subcommittee Chairman Lynch was naturally impressed with this savings! FEHBP has 270 different health plans, so the savings could be astronomical.

I explained that Texas conducted two studies examining the value of transparency in PBM contracts, leading to the legislation that is potentially so valuable for Texas' agencies.

I also pointed out that in 2002 there was a lawsuit settlement against Advance PCS, now CVS/Caremark, for fraudulent business practices in the FEHBP program and the Letter Carriers program. The money settlement was approximately $179 million plus a five-year transparency requirement much like the requirements of HR 4489. That settlement is now expired so this legislation is very timely indeed.


Richard E. Beck, RPh
Executive Director, Texas Pharmacy Business Council